Swedish Band AVATAR Helps with FOX 17 Forecast
(Jump to the 2 minute mark to see AVATAR join in) GRAND RAPIDS, Mich.--A FOX 17 forecaster received a little help during FOX 17 Morning News from an unlikely source. Swedish heavy metal band AVAT...

Ever wanted to see Johannes Eckerström and John Alfredsson crash a weather forecast?
Look no further! >D

Waterfall Forecasting

We have had by far the most success forecasting, measuring, and budgeting using waterfall forecasts.  Thanks to Josh Kopelman for his post introducing me to them here.

We like using the waterfall forecast because:

  • It forces you to make assumptions for revenues and expenses
  • It forces you to reassess these assumptions after each period so it actually gets used.
  • You can easily measure how effective your forecasts are over time, and understand what your expectations were over time.
  • Also produces a cashflow forecast.
  • Easy for the team to understand how we measure up to our goals.  
  • We broadcast the results to the team weekly and monthly, and use the team’s help to come up with new forecasts monthly.  I believe in this for the transparency, align us to a common goal, and so everyone understands our position and plans.

I plan to upload a clean template of our waterfall forecast (as soon as I can clear it of private info and figure out how to attach items to posts), heavily based on the link above message me if you’re interested before I get to putting one on this post.
Business Valuation Method: Forecasting

If you read financial reports, you will often see forecast earnings in annual reports; or at annual general meetings. Analysts in Canada & the United States also pay close attention to these forecast earnings to see if you miss or achieve above the targets. The same can be said about venture capital investments which rely even more on your forecast earnings.

The point of forecasting is not to attempt illusory certainty, but to identify the full range of possible outcomes. Try as one might, when one looks into the future, there is no such thing as “complete” information, much less a “complete” forecast. As a consequence, I have found that the fastest way to an effective forecast is often through a sequence of lousy forecasts. Instead of withholding judgment until an exhaustive search for data is complete, I will force myself to make a tentative forecast based on the information available, and then systematically tear it apart, using the insights gained to guide my search for further indicators and information. Iterate the process a few times, and it is surprising how quickly one can get to a useful forecast.

  Since the mid-1980s, my mantra for this process is “strong opinions, weakly held".
—  Paul Saffo, Strong Opinions Weakly Held 

Half the US is on fire and half is frozen

Not really. This is actually a really cool looking, high-resolution data visualization tool just released by NOAA, the National Oceanographic and Atmospheric Administration. 

The color scale is a bit stretched, but this image is actually the weather in the US during a 15 minute stretch on September 30th. Red represents hot weather and blue represents cold; lots of details, including a major cold front over the central U.S., stick out. This image comes from NOAA’s newest tool, the “High Resolution Rapid Refresh” weather data system. It represents a major upgrade in the weather data put out from NOAA.

First of all, it updates every 15 minutes, rather than every hour as in their previous version, making more rapid forecasts available, but the big improvement in this weather modeling tool is the resolution. The previous model used pixels that were 8 miles wide; in this model they are 2 miles wide, so the accuracy of future weather models for every single local area in the country should soon see a rapid improvement. 


Image credit: NOAA

Read more:
The Weatherman Is Not a Moron

Financial forecasters almost universally agreed there would be no collapse before 2008. It happened anyway. Earthquakes? The Fukushima disaster and the tsunami that caused it reminded us how awful we are at predicting those, too.

So are weathermen, the most ridiculed of predictors, actually doing it right? Although they miss a day or two here and there, our National Weather Service has been consistently improving for over a century.

In the New York Times, Nate Silver discusses how their acceptance of chaos theory helps them get past simply relying on Big Data:

Why are weather forecasters succeeding when other predictors fail? It’s because long ago they came to accept the imperfections in their knowledge. That helped them understand that even the most sophisticated computers, combing through seemingly limitless data, are painfully ill equipped to predict something as dynamic as weather all by themselves. So as fields like economics began relying more on Big Data, meteorologists recognized that data on its own isn’t enough.
Forecasting 2011′s risks affecting the economic and political landscape « Learning Change

Top forecasters predict where this year’s economic and political risks will be and why they matter. While the specter of the financial crisis still looms, countries are emerging from its wake and becoming part of an increasingly interconnected, dynamic political and economic environment. As the balance of global power changes within it, so do the risks that countries face. Prominent forecasters weigh in on the greatest issues affecting the global politics and economic landscape in the year ahead.